Around 83% of German firms that have foreign exposure have ended up suffering from a collapse in revenues due to the COVID-19 pandemic.
To make matters worse, 93% of the firms expect the global economic conditions to improve only in 2021 or possibly even later, according to a survey conducted for the German Chambers of Commerce.
The survey also showed that the pandemic brought havoc to a large number of companies, with 15% of the 3,300 companies in the survey claiming that they suffered from a halving of their annual sales made.
There has also been a distinct shift in impact occurring. When the pandemic was at its highest, Germany suffered from plenty of lockdown-related travel restrictions, hindering the tourism sector greatly.
Now however, companies are feeling the impact of the pandemic through a lack of demand.
At the start of July, 59% of the respondents claimed that demand was in very poor condition, an increase from April’s 57%.
On the other hand, supply bottleneck and production stops had become less problematic.
The COVID-19 pandemic has also had an effect on the amount of investments that firms make, with more than half of the firms surveyed being less likely to invest abroad in July, compared to just 35% in April.
Earlier on in the week, Germany’s Ifo institute stated that there could be “a wave of insolvencies in the coming months”, with 21% of German companies believing that their survival is under threat by the COVID-19 pandemic.
These concerns were primarily brought up by travel agents, hotels and restaurants.